World Bank says remittances grew significantly in the Caribbean in 2017

The World Bank says remittance flows into Latin America and the Caribbean grew 8.7 per cent in 2017, reaching another record high of nearly US$80 billion.

The Washington-based financial institution said the main factors for the increase were stronger growth in the United States and tighter enforcement of US immigration rules, “which may have impacted remittances as migrants remitted savings in anticipation of shorter stays in the United States”.

In 2018, the World Bank said remittances to the region are expected to grow 4.3 per cent to US$83 billion, “backed by improvement in the US labour market and higher growth prospects for Italy and Spain.”

Overall, remittances to low- and middle-income countries rebounded to a record level in 2017 after two consecutive years of decline, according to the World Bank’s latest Migration and Development Brief.

The bank estimates that officially recorded remittances to low- and middle-income countries reached US$466 billion in 2017, an increase of 8.5 percent over US$429 billion in 2016.

Global remittances, which include flows to high-income countries, grew 7 percent to US$613 billion in 2017, from US$573 billion in 2016, the World Bank said.

It said longer-term risks to growth of remittances include stricter immigration policies in many remittance-source countries.

In addition, the World Bank said de-risking by banks and increased regulation of money transfer operators, both aimed at reducing financial crime, “continue to constrain the growth of formal remittances.”

The global average cost of sending US$200 was 7.1 per cent in the first quarter of 2018, more than twice as high as the United Nations’ Sustainable Development Goal target of three per cent , the World Bank said.

“While remittances are growing, countries, institutions, and development agencies must continue to chip away at high costs of remitting so that families receive more of the money. Eliminating exclusivity contracts to improve market competition and introducing more efficient technology are high-priority issues,” said Dilip Ratha, lead author of the report.